CONTENTS Introduction Kiatnakin Phatra Financial Group Milestone .......................................................................................................... 008 Vision and Mission ............................................................................................................................................................ 010 Awards of Success ............................................................................................................................................................. 011 Financial Highlights .......................................................................................................................................................... 012 Message from the Board of Directors ....................................................................................................................... 015 Board of Directors ............................................................................................................................................................ 018 Executive Committee ....................................................................................................................................................... 020 Kiatnakin Phatra Financial Group Development of Kiatnakin Phatra Financial Group ............................................................................................. 022 Business Operations ......................................................................................................................................................... 026 Risk Management and Risk Factors ........................................................................................................................... 043 Management Discussion and Analysis ...................................................................................................................... 053 Please read Corporate Social Responsibility Report 2013 from www.kiatnakinphatra.com (Investor Relations Section ; Publications - Form 56-1 for the year 2013) or from Corporate Social Responsibility Report 2013 of Kiatnakin Phatra Financial Group Corporate Governance Corporate Governance .................................................................................................................................................... 065 Report of the Audit Committee ................................................................................................................................... 088 Report of the Nomination and Remuneration Committee ................................................................................ 090 Report of the Compliance and Governance Committee ..................................................................................... 092 Securities and Shareholders ......................................................................................................................................... 093 Management Structure .................................................................................................................................................... 098 Internal Controls ................................................................................................................................................................ 106 Factors Affecting Investment Decision ..................................................................................................................... 111 Financial Report Report of the Board of Directors Responsibilities for the Financial Statements ..................................... 114 Report of the Independent Certified Public Accountants .................................................................................. 115 Financial Statements and Notes to the Financial Statements.......................................................................... 116 Other Informations Board of Directors and Management ........................................................................................................................ 218 Directorship of Directors and Executives ................................................................................................................ 235 General Information ......................................................................................................................................................... 237 Branches ............................................................................................................................................................................... 240 Fully equipped, we are committed to seeking only the best alternatives for your investment. We bring our expertise and long experiences in both money and capital markets, with a range of products and services to meet your needs. Looking to the future, we create new opportunities to maximize benefit for not only our customers, but also for our community and society. 008 Kiatnakin Phatra Financial Group Kiatnakin Phatra Financial Group Milestone 1971 1973 1982 Established Kiatnakin Finance Awarded License to operate Became Broker No. 19 and Securities Company Limited in finance and securities. on the Stock Exchange with a registered capital of of Thailand. 10 million bath. 1998 2004 2005 Granted permission by Received an upgrade in credit Granted permission by the the Ministry of Finance rating from “BBB+” to “A-” Ministry of Finance to establish to resume business operations. by TRIS Rating Company Limited. a commercial bank under the name “Kiatnakin Bank Public Company Limited”. 2012 2013 September 11, 2012 Kiatnakin Bank Public Company Limited and Kiatnakin Bank Public Company Limited Phatra Capital Public Company Limited announced the completion provides full range of financial and of merger to be “Kiatnakin Phatra Financial Group”, aiming to offer investment services professionally as well as offers excellent product clients with its expertise in 2 areas of commercial banking and and services to support customer’ capital market, to create the excellence in every practice of its core success. business and to provide the ultimate financial services to clients. Annual Report 2013 009 1988 1993 1997 Listed on the Stock Exchange Became a Public Company Limited Together with 57 other financial of Thailand. institutions was forced to temporarily suspend operations due to financial crisis 2007 2008 2011 Received “Best Shareholder One of 22 from 448 listed Acquired credit rating at “A- / Treatment Awards” from companies that awarded Stable”, with “Positive” Outlook Thailand Securities Depository a “Excellent” rating for corporate by TRIS Rating Company Limited. Company Limited (TSD) governance from the Thai Institute of Directors Association (IOD) Nowadays Kiatnakin Phatra Financial Group is the new leader in specialised commercial and invesment banking in Thailand 010 Kiatnakin Phatra Financial Group Vision To be recognized as the bank that stands for customers’ success and builds a sustainable community Mission 1. To provide a complete and expert service and to enhance customers’ potential for a sustainable achievement. 2. To operate under corporate governance in concern of best outcome for all stakeholders. Annual Report 2013 011 Credit Rating by TRIS Rating Co., Ltd. The Bank and its debentures were rated “A-” with “POSITIVE” outlooK by TRIS Rating Co., Ltd. Received “Excellent Top 100 Scores” for the seventh (Corporate Governance Report) consecutive years from Annual General Meeting (AGM) Received "SET Award of Honor" (Corporate Governance in 2007 - 2013, conducted by Thai Investor Association Report) to maintain the distinction and excellence for the (TIA) and the Securities and Exchange Commission fourth consecutive year (2010-2013), during award Thailand (SEC). ceremony of "SET Awards 2013" by Stock Exchange of Thailand (SET) and Money and Banking magazine. (Outstanding Corporate Social Responsibility) Received “Investors’ Choice Award” 100 Scores for the fourth Received "Outstanding Corporate Social Responsibility consecutive years (2009-2012), from Annual General Meeting Awards" (SET market capitalization of over Bath 10 billion) (AGM), conducted by Thai Investor Association (TIA) and the for the second consecutive year (2012-2013), during award Securities and Exchange Commission Thailand (SEC) and ceremony of "SET Awards 2013" by Stock Exchange of The Stock Exchange of Thailand (SET). Thailand (SET) and Money and Banking Magazine 2013 Triple A Country Award - Best Investment Bank, Best Equity House, Best Deal - The Bank of Tokyo-Mitsubishi UFJ Limited's USD 5.6 bn offer for Bank of Ayudhya PCL 2012 Triple A Regional Deal Award - Best Secondary-PTTEP 2011 Triple A Country Award - Best Investment Bank 2010 Triple A Country Award - Best Investment Bank 2013 Country Awards - Best Private Bank, Best Equity House, 2009 Triple A Country Award - Best Merger and Acquisition House Best Investment Bank 2008 Triple A Country Award - Best Equity House, Best Merger 2013 Country Awards - Best IPO in Asia BTSGIF Infrastructure and Acquisition House Fund USD 1.4 billion 2013 Country Awards - Best Thailand Deal Bank of Tokyo- Mitsubishi UFJ USD 5.6 billion offer for BanK of Ayudhya PCL 2012 Country Awards - Best Private Bank, Best Investment 2012 Securities Analysts Award - Best Research House of Bank, Best Equity House the year (Institutional Clients), Best Finance Analyst 2011 Country Awards - Best Investment Bank, Best Equity (Institutional Clients), Best Resources Analyst (Institutional House Clients), Property and Construction